GRI South South-East studies

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Study on cross-border market integration

Macroeconomic analysis of the CEE region

Achieving a competitive, secure and sustainable internal gas market and effectively open the market for all customers and suppliers in the EU is the ultimate goal of regulatory work. The XVIII, XIX and XX European Gas Forum, taking place in Madrid, asked European energy regulators to take on a coordinating role in developing a European target model. Under this headline, the GRI SSE has focussed on identifying and developing options for cross-border market integration.

E-Bridge Consulting was commissioned by E-Control, one of the former co-chairs of the GRI SSE, with identifying the countries that could form cross-border market areas or trading regions, based on an analysis of capacities at interconnection points in the EU. In a second step, a macro-economic analysis serves to assess the costs and benefits associated with establishing a cross-border trading region consisting of Austria, the Czech Republic and Slovakia as well as cross-border market integration between Austria and Italy.

Case study on the identification of possible steps for the implementation of the Gas Target Model in the SSE region

Part I: Design principles of the CEE Trading region

Furthermore, the Czech transmission system operator NET4GAS, the Slovak transmission system operator eustream, the Austrian gas exchange CEGH and E-Control commissioned Wagner, Elbling & Company Management Advisors to develop high-level principles for such a cross-border market integration from an institutional point of view. This case study describes a model for the possible implementation of a so-called Trading Region in Czech Republic, Slovak Republic and Austria. This concept is known from the CEER Gas Target model which was endorsed by the Madrid Forum.

Road Map towards the V4 regional gas market

During the Polish Presidency of the Visegrad Group (June 2012 – June 2013), one of the Presidency’s identified priorities was intensifying the process of building a regional V4 natural gas market. To this end, the V4 project aimed at exploring the potential for gas market integration within the Visegrad Region (Poland, Czech Republic, Slovakia and Hungary) was launched. On 31 October 2012, the V4 Ministers responsible for energy signed a MoU on the integration of the V4 regional gas market setting out a timetable of actions leading to the endorsement of a Road Map towards a Regional V4 Gas Market, which was adopted by the V4 Prime Ministers during the V4 summit on 16 June 2013.

The key priorities of the Road Map are:

a)to maintain coordinated support for developing key gas infrastructure in the region, i.e. the necessary interconnectors between the V4 countries and internal gas networks to ensure a free flow of gas in the region;

b)to continue working on an optimal market model for the region – a “no-regret” open approach that takes account of changes in the market and challenges likely to occur in the coming years. This includes coordinating implementation of EU gas network codes in the region, drafting an operational study to implement the multi-coupled market zones model in the V4 and taking decisions about its future shape and progress. This should result in standardising national gas market regulations in the V4 region and thus guaranteeing optimal use of the gas transmission infrastructure created;

c)to establish the V4 Forum for Gas Market Integration and to use it as an institutional basis of cooperation. The forum should serve to strengthen cooperation between decision makers and gas sector representatives, with a view to developing an optimal market model.